A Fremont, Calif., automotive factory run by Tesla (NASDAQ:TSLA) is not an "essential business" and must shut down key operations as part of the region's COVID-19 shelter-in-place order, according to the local sheriff's office.
Alameda County, where the factory is located, on Monday mandated that all "nonessential" businesses, including restaurants and bars, close immediately. The region is attempting to slow the spread of the novel coronavirus.
Tesla initially said its plant was allowed to remain open, but the local sheriff's office in a tweet Tuesday night said that the plant is "not an essential business" and is not exempt.
Tesla: @Tesla is not an essential business as defined in the Alameda County Health Order. Tesla can maintain minimum basic operations per the Alameda County Health Order.— Alameda County Sheriff (@ACSOSheriffs) March 17, 2020
Under the order, minimum basic operations are limited to activities necessary to maintain inventory, ensure security, and process payroll, as well as keeping IT systems active for employees working from home. It does not appear that manufacturing new product, in this case automobiles, would be possible under the directive.
Automakers across the globe have been hard-hit by coronavirus-related shutdowns, but Tesla, due to its relatively small manufacturing footprint, is particularly vulnerable to a shutdown.
The Fremont factory is one of two global auto manufacturing operations run by Tesla, and its only one in North America. The majority of Tesla's output comes from the plant, including its forthcoming Model Y crossover sedan.